Ina Drew retires from JPMorgan
14 May, 2012
WASHINGTON, May 14 (UPI) — U.S. bank JPMorgan Chase said Chief Investment Officer Ina Drew is retiring in the wake of trading bets that lost at least $2 billion.
The bank said Drew, one of the most successful women on Wall Street, was retiring after 30 years with the firm. She would be replaced by Matt Zames, co-head of Global Fixed Income in the Investment Bank and head of Capital Markets.
Daniel Pinto, currently co-head of Global Fixed Income will operate that division solo, the bank said.
In Washington, White House press secretary Jay Carney said President Barack Obama was among those who thought the losses at the bank, which occurred over a 15-day trading period, validated the call for tougher bank regulations.
“As you know, the president fought very hard against Republicans and Wall Street lobbyists to get Wall Street reform passed,” Carney said.
“He fought very hard to ensure that the Volcker Rule (limiting or banning proprietary trading) was part of it, against a concerted effort to prevent that from happening,” Carney said.
JPMorgan Chase’s top officer said Sunday the U.S. investment bank would bounce back quickly the loss that sent its shares plummeting.
Chief Executive Officer James Dimon said on NBC’s “Meet the Press” the company was enjoying an overall good quarter and was tightening up its operations to prevent such shocks in the future.
“The company is going to earn a lot of money this quarter,” Dimon said, “so it’s a very strong company. We made a terrible, egregious mistake and there’s almost no excuse for it.”
The mistakes cost JPMorgan Chase at least $2 billion outright and also led to a downturn in its stock price that the Wall Street Journal said amounted to more than $14 billion.
The Journal said the investigation into the pratfall has currently focused on a London trader, who thus far has not been branded a rogue operating outside company rules.
In a statement, Dimon said, “Ina Drew has been a great partner … despite recent losses in the CIO [chief investment office].”
He also said Zames was “a world-class risk manager and executive — highly regarded for his judgment and integrity.”
Carney said he would not comment on a Securities and Exchange Commission investigation into the losses at the bank. Dimon told NBC the company was already doing an internal post-mortem and was working with federal regulators to find out exactly what happened.
The resignation came as calls mounted in Congress for an investigation.
Sen. Bob Corker, R-Tenn., has requested a hearing.
“I’d like to be dealing with reality instead of myth and perception,” said Corker, who serves on the Senate Banking Committee and was a central figure in negotiations over the Dodd-Frank financial overhaul bill.
“I just want to make sure we have a good policy outcome here,” the Los Angeles Times quoted Corker as saying.
Sen. Carl Levin, D-Mich. — a proponent of the so-called Volcker rule, limiting bank risk-taking, and other aspects of the Dodd-Frank Wall Street overhaul — was asked on NBC’s “Meet the Press” Sunday what price JPMorgan should pay for a massive trading bet that resulted in the huge losses.
“The price will be that they will lose their battle in Washington to weaken the [Volker] rule — that is the real price,” he said. “In terms of past activities, that’s in the hands of people who are assessing whether or not there was any criminal wrongdoing.”
The Wall Street Journal reported Monday the firm was prepared for a total loss of more than $4 billion over the next year, though with a market rebound, the losses could be reduced.
JPMorgan Chase is the largest U.S. bank, holding more than $2.3 trillion in outstanding loans and other assets, and employs 240,000 people in 60 countries.